surge in fourth-quarter report

By Yao Yuan and Zhang Yao

The Hangzhou-based company, which operates China’s largest online shopping sites Tmall and Taobao, said sales on its platforms reached 787 billion yuan in the fourth quarter.

And 42 percent of such sales were done on mobile devices, suggesting the rising popularity of shopping on smartphones and tablet PCs in China.

Its total sales last year hit 2.3 trillion yuan, marking an yearly rise of 47 percent.

Alibaba said active buyers on its e-commerce platforms increased by 45 percent to 334 million in 2014, and the growth stood out in China’s third- and fourth-tier cities.

The quarterly report came as the company was entangled in a row with the State Administration for Industry and Commerce (SAIC), the country’s commerce regulator that issued a report on Jan. 23 ranking Taobao the lowest in terms of certified product rate.

Taobao fired back on Tuesday and said it was unfairly treated.

It claimed the inspection was flawed in logic and contradicted previous data, pointing out the authority only made a sample of 51 items which cannot represent the enormous trade volume on the platform.

“We support the authority placing strict inspection on us, but we also feel obliged to speak out the truth when we were treated neither properly nor fairly,” Joe Tsai, executive vice chairman of Alibaba, said Thursday.

Tsai also said the company never demanded a delay of the SAIC report, responding to suspicion that SAIC postponed the release of the report to avoid affecting the company’s New York stock market listing in September last year.

BEIJING | 2015-01-29 23:47:07

Tmall stores protest

against regulator’s quality report

By Tan Moxiao, Dong Jun and Cheng Jing

Three vendors on Alibaba’s Tmall.com platform voiced strong protest against an official quality inspection report on Thursday of January 29 after a dispute between the e-commerce website and the regulator.

In an joint letter posted on their Sina Weibo accounts, three outdoor sports stores, including Xundong, Ronggu and Jiubaidu, demanded explanation from the network supervision office under the State Administration for Industry and Commerce (SAIC) over a report released last month that accused them of selling fakes.

The vendors said their stores had been frozen by Tmall since then and they had not received any report or evidence from the SAIC showing what they had done wrong.

“This was like giving us the death penalty without undergoing any trials,” read the statement.

If the SAIC refuses to respond, we have to resort administrative litigation to protect our legitimate interests, the statement added.

The latest episode came amid the ongoing salvo between Taobao, the most profitable branch of e-commerce giant Alibaba Group, and the SAIC since the latter published a quality inspection report on Jan. 23 that gave Taobao the lowest rank in terms of certified product rate.

The SAIC sample test showed that only 37.25 percent of surveyed commodities sold on the website were authentic, lower than a 58.7-percent average of major online shopping platforms. Taobao’s major rival, JD.com saw its rating at 90 percent.

Taobao fired back on Tuesday and said it was unfairly treated.

It claimed the inspection was flawed in logic and contradicted previous data, pointing out the authority only made a sample of 51 items which cannot represent the enormous trade volume on the platform.

In an official response on Wednesday, Taobao said it will file a complaint to the SAIC based on accusations of a senior official’s improper supervision.

“Director Liu Hongliang followed improper procedures and his legal assessment was emotional,” Taobao said, “He reached a conclusion that was not objective, bringing a negative effect on Taobao and e-commerce businesses.”

“We welcome any supervision that is fair but oppose nonfeasance and random or malicious official actions,” the post said.

BEIJING | 2015-01-28 20:47:27

•Taobao responds to disputed inspection report

By Fang Dong and Dong Jun

Taobao.com, China’s largest shopping website, made an official response on Wednesday of January 28 to a controversial quality inspection report by the country’s commerce regulator.

The online store will file a complaint to the State Administration for Industry and Commerce (SAIC), accusing a senior official of improper supervision, according to Taobao’s Sina Weibo account.

“Director Liu Hongliang followed improper procedures and his legal assessment was emotional,” Taobao said. “He reached a conclusion that was not objective, bringing a negative effect on Taobao and e-commerce businesses.”

“We welcome any supervision that is fair but oppose nonfeasance and random or malicious official supervision,” the post said.

The move is the latest salvo between Taobao, the most profitable branch of e-commerce giant Alibaba Group, and the SAIC since the latter published a quality inspection report on Jan. 23 that gave Taobao the lowest rank in terms of certified product rate.

Taobao fired back on Tuesday and claimed the inspection was flawed in logic and contradicted itself but the post has since been deleted.

HANGZHOU | 2015-01-28 23:41:25

•Alibaba’s financial firm launches credit-scoring system

By Yao Yuan and Zhang Yao

A financial affiliate of e-commerce giant Alibaba launched a credit-scoring system similar to the FICO score in the United States, the first after China’s central bank opened personal credit reporting market to commercial institutions.

Sesame Credit, launched by Ant Financial Services Group, will base its assessment on information including a customer’s credit card repayment, online purchase records, house rental and social networking.

The data will come from various sources including Alibaba’s e-commerce platform and the police, said Yu Wujie, chief scientist of Sesame Credit. Its service will be activated only upon customers’ request.

Yu said customers with high credit scores might enjoy favorable treatment in future business, including avoiding paying deposit during hotel check-ins or easier visa procedures. The credit scores can even be provided as a reference for future match-making.

Sesame Credit has already cooperated with partners in a variety of fields, according to Yu.

“Your credit will be like your calling card,” Yu said.

The launch of the service marks a major step in building a national credit system, which the Chinese government has promised to speed up to improve the society’s often-criticized credibility.

It followed a circular issued by the People’s Bank of China earlier this month that allowed eight institutions to conduct personal credit reports, including Sesame Credit and Tencent Credit Co., operated by Chinese Internet giant Tencent.

Industry observers say the new service mainly targets Chinese internet users, including students and those without a credit card and thus uncovered by traditional credit scoring methods.

“But its effect is still to be seen. Whether it can reflect a person’s credit conditions largely depends on whether there is sufficient data on his or her behaviors,” said Wang Wei, professor of finance with Zhejiang University.

Alibaba operates China’s largest consumer-to-consumer (C2C) shopping site Taobao. Its financial arm Alipay is the country’s largest e-payment provider.

BEIJING | 2015-01-23 20:12:46

•China sets up anti-counterfeiting alliance

By Li Laifang and Liu Baosen

A strategic alliance on infringement and counterfeiting eradication was set up in Beijing on Friday of January 23 to further improve protection of intellectual property rights (IPR).

More than 100 members of the non-government China Anti-Infringement and Anti-Counterfeiting Innovation Strategic Alliance called for modernized data sharing, a social common management mechanism and a civilian monitoring system for IPR protection.

In the Internet era, IPR infringement needs a public service platform based on big data analysis and information sharing, said Hong Yunfeng, director of the alliance.

The organization is devoted to building a fair business environment and carving out a new image internationally for Chinese enterprises and products, he said.

Members of the alliance include companies like Chinese smartphone maker Xiaomi Inc., e-commerce giant Alibaba, universities and industry associations.

“With the popularity of our products, there are more and more counterfeit cellphones,” said Liu Yanxia, anti-counterfeiting manager at Xiaomi Inc.

Liu said she hoped the alliance would protect the rights of companies with its resources.

Chinese authorities handled more than 110,000 cases of IPR infringement in the first three quarters of last year, according to the country’s top office for nationwide operations against IPR infringement and counterfeiting.

This year will see special campaigns to crack down on IPR infringement and counterfeiting in the booming e-commerce sector as well as in rural areas where law enforcement is lax, said Chai Haitao, deputy head of the office.

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